The Contribution of Education to Economic Growth: Evidence from Pakistan

Khattak, Naeem Ur Rehman and khan, jangraiz (2012): The Contribution of Education to Economic Growth: Evidence from Pakistan. Published in: International Journal of Business and Social Science , Vol. 3, No. 4 (2012): pp. 145-151.

Abstract

This paper concentrates on the contribution of education to economic growth of Pakistan during 1971-2008.The study uses Ordinary Least Squares (OLS) and Johansen Cointegration test as analytical techniques for this purpose. The results from OLS show that secondary education contributes significantly to the Real GDP Per Capita in Pakistan. The elementary education also positively affects economic growth but the result is statistically insignificant. The cointegration test results confirmed the existence of long run relationship in education and Real GDP Per Capita. It is therefore, suggested to keep education on top priority in public policies, make serious efforts for Universalization of Primary Education and discourage the drop-out rate at all levels of education to achieve sustained economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Education, Economic Growth, Elementary Education, Secondary Education, Contribution, Ordinary Least Squares
• Subjects: I - Health, Education, and Welfare > I2 - Education and Research Institutions > I25 - Education and Economic Development

References

Abbas, Q., (2001), “Endogenous Growth and Human Capital: A Comparative Study of Pakistan and Sri Lanka” ,The Pakistan Development Review, Vol. 40, No. 4, Part II, pp. 987–1007

Akintoye, I. R., and F. A. Adidu., (2008), “Optimizing National Growth through Human Resource Investment”,European Journal of Scientific Research Vol. 22, No. 3, pp. 433 443.

Albatel, A. H., (2004), “Human Resource Development and Economic Growth in Saudi Arabia”. J. King Saud University, Vol.16, pp. 35-59.

Asteriou, D., and G. M. Agiomirgianakis., (2001) “Human Capital and Economic Growth Time series Evidence from Greece”, Journal of Policy Modeling, Vol.23, pp. 481–489

Barro, R, J., (1991), “Economic Growth in Cross-Section of Countries”, The Quarterly Journal of Economics, Vol.106, No.2, pp.407-443

Barro, R,J., and J.W.Lee., (1994), “Sources of Economic Growth”, Carnegie-Rochester Conference Series on Public Policy, Vol.40, pp.1-46

Bedard, K., (2001), “Human Capital versus Signaling Models: University Access and High School Dropouts”,The Journal of Political Economy, Vol. 109, No. 4, pp. 749-775

Bloom, D. E., D. Canning., and P. N. Malaney., (2000), “Population Dynamics and Economic Growth in Asia”,Population and Development Review, Vol.26, pp.257-290

Borensztein E, J. D. Gregorio and J-W. Lee., (1998), “How does foreign direct investment affect Economic Growth”, Journal of International Economics, Vol. 45,pp. 115–135

Canlas, D.B., (2003) “Economic growth in the Philippines: theory and evidence” Journal of Asian Economics Vol.14, pp.759-769

Echevaria, C.A and A.Iza. (2006) “Life expectancy, human capital, social security and growth”, Journal of Public Economics, Vol. 90, pp. 2323–2349

Gokcekus, O., A.Ntow, Kwabena., and T.R.Richmond (2001), “Human Capital and Efficiency: The Role of Education and Efficiency”, Journal of Economic Development, Vol.26, 103-113.

Googe, R,B., (1959), “ Adding to the Stock of Physical and Human Capital”, American Economic Review, Vol.49, No.2

Government of Pakistan, Economic Survey of Pakistan (various issues), Economic Advisors wing, Ministry of Finance, Islamabad.

Government of Pakistan. (2005). The State of Education in Pakistan, Policy and Planning Wing, Ministry of Education, Islamabad

Gundlach, E (2001), “Education and Economic Development: An Empirical Perspective”, Journal Of Economic Development,Vol. 26, No. 1, pp.1-24

Harmon, C., H. Oosterbeek., and I. Walker (2003), “The returns to education: Microeconomics”. Journal of Economic Surveys, Vol. 17, No. 2, pp.115-155

Jorgenson, D. W. and B. M. Frauwani. (1992). “Proceedings of Symposium on Productivity Concepts and Measurement Problems in Service Industries”. The Scandinavian Journal of Economics, Vol. 94, pp. S51-S70.

Khan, M. S. (2005). “Human Capital and Economic Growth in Pakistan”, Pakistan Development Reviews, Vol. 44, No. 4, Part 2, pp. 455-478.

Lin, T.C., (2004), “The role of higher education in economic development: an empirical study of Taiwan case”, Journal of Asian Economics, Vol. 15, pp. 355–371

Lucas, R., Jr. (1988). “On the Mechanics of Economic Erowth”, Journal of Monetary Economics, vol. 22, pp. 3-22, North Holland.

Mankiw, N. G., D. Romer and D. N. Weil., (1992). “The Empirics of Economic Growth” Quarterly Journal of Economics, Vol.107, No. 2, pp. 407-435.

McMahan, W. W., (1998), “Education and Growth in East Asia” Economics of Education Review, Vol. 17, No. 2, pp.159-172

Petrakis, P.E and D. Stamatakis., {2002) “Growth and educational levels: a comparative analysis”Economics of Education Review, Vol. 21, pp. 513–521

Pritchett, L.,(1996), “W here Has All the Education Gone?” Policy Research Working Paper 1581 The World Bank,Policy Research Department, Poverty and Human Resources Division

Romer, P. M., (1994). “Economic Growth and Investment in Children” Duedalus, Vol.123, No. 4, Health and Wealth, pp.141-154.

Schultz, T. W., (1961), “ Investment in Human Capital”, The American Economic Review, Vol. 51, No. 1, pp. 1-17

Stevens, M., (1999), “Human Capital theory and UK Vocational Training Policy”, Oxford Review of Economic Policy, V ol.15, No.1, pp16-32

Tallman, E.W and Wang, P., (1994), “Human capital and endogenous growth evidence from Taiwan”, Journal of Monetary Economics, Vol. 34, Issue 1

Tamura, R., (2001), “Teachers, Growth, and Convergence”, The Journal of Political Economy, Vol. 109, No. 5, pp. 1021-1059 World Development Indicators (various Issues), World Bank